Price tags of war

The Israeli offensive
in Gaza meant to thwart the threat of Hamas rocket
fire on the western Negev and southern apparently has a hefty price tag, as the first six days' bottom line comes to millions of dollars.

Bothe the IDF and the Treasury refuse to disclose the exact amounts spent directly on the fuel and ammunitions used in Operation Cast Lead so
far, but a political source familiar with the details claimed that the aerial assaults alone cost about $27 million to $39 million a day and may soon reach the $52 million mark; totaling the first six day of the operation at nearly $265 million.

Offensive

Olmert: Patience needed on Gaza op / Roni Sofer

Flanked by Foreign Minister Livni and Defense Minister Barak, Prime Minister Olmert warns operation against Hamas in Gaza may take time, tells residents to brace for more missiles attacks

The estimated cost is based on the number of attacks mounted by the Israel Air Force, flight time and number and type of aircraft used; but mostly the kind of ammunition used in each strike.

The Treasury has adamantly denied these figures.

Funding Cast Lead is a complex matter on to itself: The 2009 budget has yet to be approved by the government, and starting this week the defense establishment, and all other government bureaus, is operating on monthly budget provisions determined by the 2008 budget.

The IDF was allotted an auxiliary budget of $211 million, by the post-Second Lebanon War Brodet Committee, for contingencies the liked of the Gaza offensive and if tapped into, probably funded the first week of fighting.

Should the operation prove extensive, the defense establishment would have no choice but to ask the government for special war-time funding, which will dip into the national deficit and public debt, an even at the possible expense of parts of next year's budget.

Operation aside, the government would also have to find the funds to compensate dozens of homeowners, whose property has been damaged by Hamas shelling. The Tax Authority reported of 300 claims in the past six days alone, a number which will surely rise as the offensive continues.

The Tax Authority estimated property damage so far at $9 million.

Property damage in Beersheba (Photo: Herzl Yosef)

Additional financial damage, which has yet to be assets, is that suffered by the businesses in southern Israel. The Home Front Command has instructed all commerce be suspended unless deemed an "essential business" or is duly fortified, which the majority of small businesses are not.

Initial figures estimate that retailers in the south have lost about $7 million in the first week of fighting alone.

The major industries have remained open, but employers have reported a 20% absence rate – in accordance to the Home Front Command's order, school has been suspended in most of the bombarded cities, meaning most parents have had to stay home with their children.

The government is expected to instate a compensation levels for business owners, as it did after the Second Lebanon War.